Government integrity holds key to tackling corporate corruption -- study

November 20, 2019

Government leaders must set a good example to the business community if they want to eliminate corporate corruption, a new study reveals.

Financial incentives and criminal punishment will not root out corrupt business practices, but a government culture of honesty, integrity and strong leadership could help to cure corruption.

University of Birmingham researchers discovered that corporate governance choices made by business leaders are directly related to government integrity. Dishonest practices are more likely in states where the government operates in a way that is dishonest or unethical.

Professors Amon Chizema and Ganna Pogrebna, from Birmingham Business School, examined World Economic Forum data from 2011 to 2018 on small, medium and large companies in agriculture, manufacturing and non-manufacturing industries - such as mining and quarrying, utilities and construction - as well as services with headquarters in 93 countries.

The researchers published their findings in the Leadership Quarterly, also demonstrating experimentally that leaders were more likely to make honest decisions and abstain from bribery and tax evasion when asked what a good leader would do in a particular business situation.

Professor Pogrebna commented: "This simple solution of asking 'what would a good leader do' had a much higher positive effect on leadership integrity than changing financial incentives or increasing the propensity of being caught and punished by the law.

"The world craves credible and sincere leadership. Our policies need to shift from financial and legal solutions of the corruption problem to influencing leadership values and culture at all levels of the society."

When listing most important values in the desirable leadership culture, experimental participants named "credibility" as the most important characteristic of a good leader. Experimental study results demonstrate that Chief Executive Officers (CEO) are more likely to cheat in a corrupt environment than in a transparent one.

Beyond the question of corporate governance, the researchers have unveiled weaknesses in current anti-corruption practices within the business environment.

Where government integrity is low, the corruption problem arises from a gap between what is right and what is mandated by law. This gap may be bridged by instilling acceptable social norms in corporate leaders.

Professor Chizema said: "Humanity has grappled with corruption for decades with many solutions proposed, yet the most widely-used toolkit involves regulation, law enforcement and economic measures, which have failed to eradicate dishonest business practices."

"Governments need to get it right first before expecting corporate citizenry to do the right thing. Norms often precede legislation but are supported, maintained and extended by laws. If those with power to change societal norms do not have the interest or motive to do so, corporate leaders may continue to make bad corporate governance choices and decisions."

The researchers argue that the effect of government integrity must be taken into account - alongside company and CEO characteristics, plus corporate governance mechanisms - when analysing corporate leadership performance.

Their study also has implications for investors - for example, using knowledge of a country's level of government integrity, minority investors may be able to work out how likely they are to suffer from exploitation by majority shareholders or self-interested executives.

Where government integrity is low, minority investors may have to consider mechanisms that allow their voices to be heard - either by pooling resources, engaging more with legal advisors or making use of proxy voting.
For more information, interviews and an embargoed copy of the research paper, please contact Tony Moran, International Communications Manager, University of Birmingham on +44 (0) 121 414 8254 or +44 (0)782 783 2312 or For out-of-hours enquiries, please call +44 (0) 7789 921 165.

Notes to Editors

* The University of Birmingham is ranked amongst the world's top 100 institutions, its work brings people from across the world to Birmingham, including researchers and teachers and more than 6,500 international students from over 150 countries.

* 'The impact of government integrity and culture on corporate leadership practices: Evidence from the field and the laboratory' - Amon Chizema, Ganna Pogrebna is published in the Leadership Quarterly. The research paper can be downloaded at Please feel free to include a link to the paper in any online articles.

University of Birmingham

Related Law Enforcement Articles from Brightsurf:

Repeated small blasts put military, law enforcement at risk for brain injury
Military and law-enforcement personnel repeatedly exposed to low-level blasts have significant brain changes - including an increased level of brain injury and inflammation -- compared with a control group, a new study has found.

Enforcement more effective than financial incentives in reducing harmful peat fires?
A new study looking at incentives to reduce globally harmful peatland fires suggests that fear of enforcement and public health concerns influence behaviour more than the promise of financial rewards.

Study: Increased presence of law enforcement officers in schools does not improve safety
A new longitudinal study sought to learn more about the impact of school resource officers (SROs).

Investigation: Problems in clinical trial reporting continue amid lax federal enforcement
Companies, universities, and other institutions that conduct clinical trials are required to record the results of most of them in a federal database, so that doctors and patients can see whether new treatments are safe and effective.

Catch-22 -- stricter border enforcement may increase agent corruption
Analysis of corruption cases among customs officers and Border Patrol agents reveals alarming trends depending on their years of service.

Dog down: Effort helps emergency medical staff treat law enforcement K-9s
Law enforcement K-9s face the same dangers their human handlers confront.

Vanished classmates: The effects of immigration enforcement on school enrollment
Partnerships between Immigration and Customs Enforcement (ICE) and local police departments designed to enforce immigration laws reduced the number of Hispanic students in US public schools in adopting counties by 10 percent after two years.

Investigative report on FDA enforcement under Trump from Science's news department
Despite being one of the nation's most vital watchdogs, compliance and enforcement actions by the US Food and Drug Administration (FDA) have severely declined since the Trump administration took office, according to an investigative report from Charles Piller, a contributing correspondent in the News department at Science.

FSU researcher finds adolescent views of law enforcement can improve over time
A research team, led by Assistant Professor of Criminology Kyle McLean, found that teens' attitudes toward law enforcement tend to improve as they reach adulthood.

Automated speed enforcement doesn't just reduce collisions -- it helps reduce crime
It's widely accepted that automated photo enforcement programs targeting speeding help reduce collisions and promote safe driving.

Read More: Law Enforcement News and Law Enforcement Current Events is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to